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Friday, 26 November, 1999, 18:12 GMT
Is Carlton United a winning team?
Television is undergoing a revolution

By BBC Arts and Media Correspondent Nick Higham

Officially, the merger of Carlton Communications and United News and Media is good news for viewers - even though the companies expect it will lead to some 250 job losses and savings of 40m a year.

United's chief executive Lord Hollick says viewers should benefit from the greater investment the combined group plans to make in programme production for the ITV network and overseas.

Lord Hollick: High-flyer
The regional news services of all six ITV licences involved - Carlton, Central, Meridian, Anglia, HTV and WestCountry - will remain "wholly intact", according to the man who runs Carlton's television interests, Nigel Walmsley.

Indeed the deal won't get approval from the regulator, the Independent Television Commission, until a formal commitment from the new company that regional services will be maintained and protected.

But there are still many uncertainties about the deal.

For a start the companies have taken a gamble on getting the regulators' approval.

The six ITV licences between them have 14.9% of all television viewing in the UK - fractionally under the 15% top limit laid down by law.

But the combined group also has significant stakes in GMTV and Channel 5: if the Commission decided to count some of their viewing shares towards Carlton-United's total it could bust 15%.

Carlton is already a major media company
However Lord Hollick says he's confident the group won't have to sell off any of its television interests.

As well as viewing share there's an upper limit of 25 per cent on one company's share of television advertising revenue, and Carlton-United certainly exceeds that.

The limit is part of an agreement made five years ago between the television companies and the Office of Fair Trading - an agreement currently under review.

Carlton and United are clearly hoping the limits will be relaxed, something advertisers won't like.

The group is also gambling that merging will indeed make it big enough to compete seriously with the giants of the global media scene, like Rupert Murdoch's News Corporation.

Although Carlton-United is valued at 7.8bn, that's still small compared to the planned merger - valued at $36bn - of the American media companies CBS and Viacom.

News Corp, which controls Britain's biggest pay-TV company, BSkyB, will be a major competitor.

Carlton already owns half of the digital TV company Ondigital, which competes directly with BSkyB's Sky Digital service.

Uneasy bedfellows

Another rival is likely to be the third remaining large ITV group, Granada, now dwarfed by Carlton-United.

But perhaps the biggest gamble of all is that two such very different men as United's founder Lord Hollick and Carlton boss Michael Green can work together.

They're both self-made tycoons, publicity shy and by all accounts ruthless.

But Green was an academic slow starter - he left school with a handful of O Levels to work in a shoeshop. Hollick was a high-flyer, who started out as a merchant banker.

Green is a Conservative, and a great admirer of Margaret Thatcher. Hollick is a Labour peer and a former government adviser.

It's been noticeable that, since he acquired Express Newspapers, the Daily Express has moved markedly from a Conservative to a left-of-centre newspaper - although Hollick says that's nothing to do with him.

Both men are used to getting their own way. They could well make uneasy bedfellows.

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See also:
26 Nov 99 |  Business
8bn media merger agreed
26 Nov 99 |  Business
Green keeps growing
26 Nov 99 |  Business
Hollick makes his move

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